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Page added on November 25, 2013

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Peak Oil, Not

Geology

Do you remember the many predictions in past years that oil production has peaked world-wide and we will soon deplete this natural resource? M. King Hubbert, a petroleum engineer with the Shell Research Lab, developed his theory of Peak Oil  in 1956, predicting U.S. production of oil would peak between 1965 and 1970 and thereafter continue to drop. The Oil Crisis of the early 1970s gathered many followers of Peak Oil and many true believers remain today as the many website that support the theory attest.

Peak Oil aficionados have produced a series of new predictions over the years, each failing to produce useful results for two obvious reasons. First, the supply of oil (and thus the price) is often manipulated for political purposes. No surprise there. Second, the theory fails to take into consideration advances in technology. New drilling techniques allow recovery of petroleum and natural gas that were previously inconceivable and will continue to do so. The steadily increasing amount of oil being produced today demonstrates the uselessness of the peak oil theory.

The Peak Oil lobby still has quite a lot of political power. As late as 2011, UK ministers were (over)reacting to predictions that a drastic reduction in oil production was coming soon and the UK economy would tank by 2015. In the U.S., A study released in mid-November by the University of Maryland made the news with its dire prediction that U.S. oil production has a “significant” risk of peaking as soon as 2020 and a “production peak for conventional oil [is] likely before 2030.” A closer look at any of the persons or groups that produce these dire predictions finds the presupposition that burning oil is something we shouldn’t do, for any number of reasons. Instead of predictions, let’s look at some facts about U.S. oil production.

The U.S. Energy Information Administration (EIA) reported on U.S. oil reserves in August of this year. Since 2008, the “proven reserves” of petroleum rose from 20.6 billion barrels to 29 billion in 2011. Proven reserves are those that is economically recoverable at current prices using current technology. As technology improves, so will the recoverable oil reserve estimates.

Rising reserves are found globally. A recent report (late October 2013) by the World Energy Congress concluded that “there is a greater abundance of energy resources in the world today than at any other time, and if properly managed, the reserves are sufficient to meet even a significant upturn in demand for decades to come.” The report states that global crude oil reserves today are almost 25% larger than in 1993 even with the 20% increase in production that has occurred. The reserves “could be quadrupled if unconventional resources such as oil shale, oil sands, extra heavy oil, and natural bitumen are taken into account.” Tapping these resources is more a political problem than a technology problem.

Reserves are rising and so is production. In the U.S., the EIA announced in early November that petroleum production averaged 7.7 million barrels per day and that net oil imports had dropped to the lowest level since 1991. The EIA also predicted that oil production is expected to rise to 8.5 million barrels per day in 2014.  North Dakota’s Bakken field alone is expected to hit the 1 million barrel per day milestone in December. A decade ago, North Dakota was an economic also-ran. Today, the state’s gross domestic product exceeds the national average by 29%.  At the rate petroleum production is rising, the U.S. should become completely self-sufficient in 20 years.

The EIA predictions are all the more amazing because of the roadblocks the federal government has placed on oil production during the past few years. The Congressional Research Service, in March, reported that the boom in oil production was the result of production on private land. “All of the increase from fiscal 2007 to fiscal 2013 took place on non-federal lands, and the federal share of total U.S. crude oil production fell by seven percentage points.” In North Dakota, a drilling permit can be obtained in about 10 days, on federal land, between 2006 and 2011, the time increased from 218 days to 307 days.

The benefit of oil and gas exploration and production to the economy of the U.S. by the end of 2013 is predicted to reach one billion dollars a day, rising 1,300 percent, from $70 million per day in January 2010 to $900 million in April 2013. .

With the dropping price of gasoline at the pump, the White House couldn’t resist taking credit where none is due. Dan Utech, the White House global warming czar said, “The actions that the President Obama and his administration have taken to reduce our reliance on foreign oil play a significant role in this story [dropping gasoline prices].” I suppose this political “gas” is just another petroleum production byproduct.

–Dr. Robert Peltier, PE is POWER’s consulting editor

POWER Magazine



10 Comments on "Peak Oil, Not"

  1. J-Gav on Mon, 25th Nov 2013 11:19 pm 

    Tech tech tech tech, tick tick tick tick : Boom!

  2. mo on Tue, 26th Nov 2013 1:15 am 

    Another magazine Ive never heard of

  3. James A. Hellams on Tue, 26th Nov 2013 1:38 am 

    This article loves to cite an example that the proven reserves of the US have risen to 29 billion barrels; to support its contention that peak oil is dead.

    This article is in an amazing sense of denial of reality.

    The average consumption oil by the US (the last time I looked) was 8 billion barrels of oil annually. This would consume the 29 billion barrels of oil in the US in just 3.6 years!

  4. Bob Owens on Tue, 26th Nov 2013 2:17 am 

    US oil production peaked in 1970, buddy! Wake me up when you surpass 1970’s peak.

  5. Newfie on Tue, 26th Nov 2013 2:44 am 

    Cornucopian Magazine. LOL.

  6. Dave Thompson on Tue, 26th Nov 2013 2:53 am 

    “At the rate petroleum production is rising, the U.S. should become completely self-sufficient in 20 years.” Yes of course Self-sufficient is where we are heading as a nation. Is it ever going to end?

  7. Beery on Tue, 26th Nov 2013 12:34 pm 

    Well, clearly oil is an infinite resource. The idea that it’s limited and governed by the laws of physics is obviously false, as is the fact that production from every well ever drilled has increased, peaked, then declined. The fact that conventional oil peaked in 2005 is something to be glossed over or ignored completely.

    This is the cornucopian dream: a magical world of ever increasing oil supply and ever more strident denial of fact.

  8. Pops on Tue, 26th Nov 2013 12:34 pm 

    Oil consumption in the US has fallen around 3MMbopd over 6 years, at this rate we’ll be self-sufficient in oil in less than 40 years.

  9. SilentRunning on Tue, 26th Nov 2013 3:54 pm 

    Trouble is: The increased production from fracked wells is a “flash-in-the-pan”. Fracked wells deplete at extremely high rates, and the well costs are very high. Already the best areas for fracked oil are petering out – and the areas that remain are of even lower quality and even higher costs.

    Fracked oil will be over in less than 10 years (fracked natural gas will last a little longer).

    In 10 more years the traditional oil wells will be even more depleted, and oil production will collapse.

  10. Jimmy on Tue, 26th Nov 2013 10:08 pm 

    I don’t think it’ll be too long until the average American can’t afford any oil, which will mean the USA will get that energy independence it’s been talking about. The USA will be energy independent alright but they won’t like it.

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